Norbert Barthle

Recession-hit countries including France, Spain and Italy won greater budget freedom as the European Commission tried to stem the euro economy’s longest slump and bring down a 24% youth unemployment rate.

French Finance Minister Pierre Moscovici declared the era of austerity over after his German counterpart offered flexibility on deficit cutting amid renewed bickering between Europe’s two biggest economies.

Global stocks rose the most in a month amid better-than-forecast U.S. earnings and industrial production, while the euro and Spanish bonds gained as two German lawmakers said the country is open to Spain seeking a precautionary credit line.

Chancellor Angela Merkel is considering easing Greece’s bailout terms, fanning tensions with members of her coalition who oppose giving the Greek government any more concessions, two German lawmakers said.

The European Commission called for direct euro-area aid for troubled banks, and touted a Europe- wide deposit-guarantee system and common bond issuance as antidotes to the debt crisis now threatening to overwhelm Spain.